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Oklahoma Clean Water State Revolving Fund loan account administrative fund : annual financial statements as of and for the fiscal years ended ... and independent auditor's reports.

W 1700.3 .C623f 2008-2009 c.1
I.
State of Oklahoma
WATER RESOURCES BOARD
the water agency
OKLAHOMA CLEAN WATER STATE REVOLVING
FUND LOAN ACCOUNT ADMINISTRATIVE FUND
ANNUAL FINANCIAL STATEMENTS
AS OF AND FOR THE FISCAL YEARS ENDED JUNE 30, 2009 AND 2008
AND INDEPENDENT AUDITOR'S REPORTS
OKLAHOMA CLEAN WATER STATE REVOLVING
FUND LOAN ACCOUNT ADMINISTRATIVE FUND
ANNUAL FINANCIAL STATEMENTS
AS OF AND FOR THE FISCAL YEARS ENDED JUNE 30, 2009 AND 2008
AND INDEPENDENT AUDITOR'S REPORTS
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
ITABLE OF CONTENTS
Page
Independent Auditor's Report on Financial Statements 3
Management's Discussion and Analysis 5-8
The Basic Financial Statements
Statements of Net Assets 10
Statements of Revenues, Expenses, and Changes in Net Assets 11
Statements of Cash Flows 12
Footnotes to Statements 13-17
Internal Control over Financial Reporting and Compliance 18-19
Independent Auditor's Report on Internal Control and Compliance
2
JOHN M. ARLEDGE & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Members of the
Oklahoma Water Resources Board
We have audited the accompanying statements of net assets of the Oklahoma Water Resources
Board/Oklahoma Clean Water State Revolving Fund Loan Account Administrative Fund (the "Fund") as
of June 30, 2009 and 2008, and the related statements of revenues, expenses and changes in net assets and
cash flows for the years then ended. These fmancial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the fmancial statements referred to above present fairly, in all material respects, the
financial position of the Fund as of June 30, 2009 and 2008, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 23,
2009, on our consideration of the Fund's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over fmancial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit.
The Management's Discussion and Analysis section on page 4 is not a required part of the basic financial
statements but is supplementary information required by accounting principles generally accepted in the
United States of America. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion on it.
309 NORTH BRYANT. EDMOND, OKLAHOMA 73034 • (405) 348-{)615 • FAX(405) 348-{)931 • www.jmacpas.com
MEMBER OF AICPA AND OSCPA
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
MANAGEMENT'S DISCUSSION AND ANALYSIS
Our discussion and analysis of the Oklahoma Clean Water State Revolving Fund Loan Account
Administrative Fund's (the "Fund") financial performance provides an overview of the Fund's financial
activities for the fiscal year ended June 30, 2009. Please read it in conjunction with the Fund's financial
statements, which begin on page 10. The Oklahoma Water Resources Board (the "Board") administers
the Fund in conjunction with the Oklahoma Clean Water State Revolving Fund Loan Account Program
(the "Program").
Financial Highlights
• The Fund's net assets decreased 6.7%. Ending net assets decreased from $924,524 to $826,180
between FY 2008 and FY 2009.
• The Fund's net assets decreased around I% from FY 2007 to FY 2008. Ending net assets decreased
from $934,508 to $924,524 between FY 2007 and FY 2008.
Using This Annual Report
This annual report is presented in a format that substantially meets the presentation requirements of the
Governmental Accounting Standards Board (GASB) in accordance with generally accepted accounting
principles. The Fund is accounted for and presented similar to a special-purpose government engaged
solely in business-type activities.
The financial statements for the Fund are presented after the Management's Discussion and Analysis in
this annual report and then followed by the footnotes in this order:
• Management's Discussion and Analysis - that provides useful analysis that facilitates a better
understanding of the Fund's financial condition and changes therein.
• Basic Financial Statements
o Statements of Net Assets
o Statements of Revenues, Expenses and Changes in Net Assets
o Statements of Cash Flows
• Footnotes - that elaborate on the accounting principles used in the preparation of the financial
statements and further explain financial statement elements.
A Financial Analysis of the Fund
One of the most frequently asked questions about the Fund's finances is, "Has the overall financial
condition improved, declined or remained steady over the past year?" The Statement of Net Assets and
the Statement of Revenues, Expenses, and Changes in Net Assets report information about the Fund as a
whole and about its activities in a way that helps answer this question. The following tables present a
condensed comparative presentation of net assets and changes therein.
(Unaudited. See accompanying auditor's report.)
5
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Oklahoma Water Resources Board
CWSRF Loan Account Administrative Fund
Net Assets
Business-Type
Activities
June 30
2009 2008 2007
Current assets $ 1,017,540 $ 1,280,205 $ 1,295,881
Capital assets, net 17,996 30,028 42,060
Total assets 1,035,536 1,310,233 1,337,941
Current liabilities 173,356 385,709 403,433
Total liabilities 173,356 385,709 403,433
Net assets
Invested in capital assets, net 17,996 30,028 42,060
Unrestricted 844,184 894,496 892,448
Total net assets $ 862,180 $ 924,524 $ 934,508
Significant variances between 2008 and 2009 related to current liabilities is the result of the fund paying
back the overpayment of administrative fees received in fiscal year 2007 to the Drinking Water
administrative fund.
(Unaudited. See accompanying auditor's report.)
6
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Oklahoma Water Resources Board
CWSRF Loan Account Administrative Fund
Revenues, Expenses, and Changes in Net Assets
Business- Type
Activities
Years Ended June 30,
2009 2008 2007
Revenues
Operating revenues $ 1,016,003 $ 931,959 $ 935,329
Non-operating revenues 19,130 33,968 23,432
Total revenues 1,035,133 965,927 958,761
Expenses
Personnel expense 646,935 588,397 533,992
Indirect cost expense 345,344 294,208 262,498
Other administrative expenses 78,678 69,869 55,827
Depreciation expense 12,032 12,032 10,044
Total expenses 1,082,989 964,506 862,361
Net Income (loss) before transfers (47,856) 1,421 96,400
Transfers to other programs (14,488) (11,405) (9,655)
Increase in net assets (62,344) (9,984) 86,745
Total net assets - beginning 924,524 934,508 847,763
Total net assets - ending $ 862,180 $ 924,524 $ 934,508
There were no significant variances between the years.
Capital Assets
At the end of June 30, 2009, the Fund had $17,996 invested in capital assets, net of depreciation,
including computer software and an automobile. This represents a net decrease of $12,032 over the prior
year.
(Unaudited. See accompanying auditor's report.)
7
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRA TIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Oklahoma Water Resources Board
CWSRF Loan Account Administrative Fund
Capital Assets
(Net of accumulated depreciation)
Business-Type
Activities
Years Ended June 30,
Software
Automobile
$ 8,058
9,938
$ 16,115
13,913
$ 24,172
17,888
Totals $ 17,996 $ 30,028 $ 42,060
Other than depreciation, there were no additions or deletions to capital assets in FY 2009 or 2008.
See Note 3 to the financial statements for more detailed information on the Fund's capital assets and
changes therein.
Economic Factors and Next Year's Outlook
The Oklahoma Clean Water State Revolving Fund has been extremely popular with communities that
borrow from the program. The Program's financing strategy of providing long-term loans at 60% of
market rate has been consistent since program start up in 1990. No additional staff is planned at this
time, therefore Fund expenses should be fairly consistent with the amount expended in FY 2009.
Contacting the Fund's Financial Management
This financial report is designed to provide the Board's accountability of the Fund. If you have questions
about this report or need additional financial information, contact the Financial Assistance Division of
the Oklahoma Water Resources Board at 3800 N. Classen Blvd, Oklahoma City, OK 73118.
(Unaudited. See accompanying auditor's report.)
8
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
BASIC FINANCIAL STATEMENTS
9
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRA TIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
2009 2008
$694,603 $868,735
320,988 304,223
103,915
1,949 3,332
1,017,540 1,280,205
Statements of Net Assets - June 30, 2009 and 2008
ASSETS:
Current Assets:
Cash and cash equivalents
Administrative fee receivable
Other receivable
Interest receivable
Total CUITentassets
Noncurrent Assets:
Depreciable capital assets, net 17,996
Total noncurrent assets 17,996
Total assets 1,035,536
LIABILITIES:
Current Liabilities:
Accounts payable
Due to Drinking Water Treatment Loan Administrative Fund
130,489
42,867
Total current liabilities 173,356
NET ASSETS:
Invested in capital assets, net of related debt
Unrestricted
17,996
844,184
Total net assets $862,180
See accompanying notes to the basic financial statements.
10
30,028
30,028
1,310,233
55,861
329,848
385,709
30,028
894,496
$924,524
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Statements of Revenues, Expenses, and Changes in Net Assets - Years Ended June 30, 2009 and 2008
Change in net assets
2009 2008
$1,006,153 $ 929,459
9,850 2,500
1,016,003 931,959
646,935 588,397
345,344 294,208
78,678 69,869
12,032 12,032
1,082,989 964,506
(66,986) (32,547)
18,730 33,968
400
19,130 33,968
(47,856) 1,421
(14,488) (11,405)
(62,344) (9,984)
924,524 934,508
$862,180 $924,524
OPERATING REVENUES:
Administrative fee income
Application fee income
Total operating revenues
OPERATING EXPENSES:
Personnel expense
Indirect cost expense
Other administrative expenses
Depreciation expense
Total operating expenses
OPERATING INCOME (LOSS)
NON-OPERATING REVENUES (EXPENSES):
Interest income
Other income
Total non-operating revenues (expenses)
Net income (loss) before transfers
Transfers to Oklahoma Clean Water State Revolving Loan Account Program
Total net assets - beginning
Total net assets - ending
See accompanying notes to the basic financial statements.
11
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Statements of Cash Flows - Years Ended June 30, 2009 and 2008
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Administrative fee income s 989,388 s 923,556
Application fee income 9,850 2,500
Payments to employees (646,935) (588,397)
Payments to other suppliers (532,460) (275,572)
Other income 400
Net Cash Provided by Operating Activities (179,757) 62,087
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers to Oklahoma Clean Water State Revolving Loan Account Program (14,488) (11,405)
Net Cash Provided by (Used in) Noncapital Financing Activities (14,488) (11,405)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 20,113 33,740
Net Cash Provided by Investing Activities 20,113 33,740
Net Increase (Decrease) in Cash and Cash Equivalents (174,132) 84,422
Balances - beginning of the year 868,735 784,313
Balances - end of the year s 694,603 s 868,735
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss) s (66,986) s (32,547)
Adjustments to reconcile operating income to net cash provided by
(used in) operating activities:
Depreciation 12,032 12,032
Other income 400
Change in assets and liabilities:
Decrease (Increase) in administration fee receivable (16,765) (5,903)
Decrease (Increase) in other receivable 103,915 106,229
Increase (Decrease) in accounts payable 74,628 (17,724)
Increase (Decrease) in Due to OWAdmin fund (286,981 )
Net Cash Provided by Operating Activities s (179,757) $ 62,087
See accompanying notes to the basic financial statements.
12
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Footnotes to the Basic Financial Statements:
1. Summary of Significant Accounting Policies
Reporting Entity
The Oklahoma Water Resources Board/Oklahoma Wastewater Facility Construction Revolving
Loan Account Program (the "Program") was created pursuant to the 1987 Amendments (P.L.
100-4) to the "Clean Water Act" (P.L. 92-S00) to provide a perpetual fund for financing the
construction of wastewater treatment facilities for municipalities and other public entities. The
Program funds loans with Federal grants, State matching funds, principal repayments, bond
proceeds, and interest received on loans and invested cash balances. State matching funds are
provided through State appropriations or through the issuance of notes payable.
The Oklahoma Water Resources Board/Oklahoma Wastewater Facility Construction Revolving
Loan Account (the "Program"), Title 82 Oklahoma Statutes, Sections 108S.S1 et seq. was created
pursuant to the 1987 Amendments (P.L. 100-4) to the Federal Clean Water Act (P.L. 92-S00) set
apart from all other Oklahoma Water Resources Board accounts and programs to be permanent
and perpetual; not subject to fiscal year limitations. Title 82, Section 108S.64 created the
Oklahoma Water Resources Board/Oklahoma Wastewater Facility Construction Revolving Loan
Administrative Fund (the "Fund") for the purpose of administering the Program, transferring
monies into the Program and for other purposes authorized by the Federal Clean Water Act. The
Fund consists of revenues primarily from loan administrative fees, Fund investment earnings and
loan processing and application processing fees.
Administrative fees are assessed on loans made from the Program. Fees are assessed to each
participating borrower at the rate of one-half of one percent (O.S%) per annum of the amount of
each borrower's loan balance outstanding, and loan application fees.
The significant accounting principles and practices followed by the Fund are presented below:
Basis of Accounting and Measurement Focus
The Fund is accounted for and presented similar to a special-purpose government engaged solely
in business type activities.
The Fund uses the accrual basis of accounting whereby expenses are recognized when the
liability is incurred and revenues are recognized when earned.
The Fund uses the economic resources measurement focus where all assets, liabilities, net assets,
revenues, expenses and transfers relating to the Program and net income and capital maintenance
are measured.
The accompanying financial statements have been prepared in conformity with generally
accepted accounting principles as prescribed by the Governmental Accounting Standards Board
("GASB"). Under the guidelines of GASB Statement 20, the Fund has elected not to apply
13
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
1. Summary of Significant Accounting Policies (cont'd)
Financial Accounting Standards Board Statements and Interpretations issued after November 30,
1989.
Cash and Cash Equivalents
The Fund considers all highly liquid debt instruments purchased with an original maturity of
three months or less and money market funds to be cash equivalents.
Capital Assets
Capital assets are stated at cost, less accumulated depreciation. Depreciation is charged to
operating expense and is computed using the straight-line method. The useful life of software
has been estimated at 7 years. The useful life of automobiles has been estimated at 6 years.
Maintenance and repairs are charged to operations when incurred and improvements are
capitalized. The Fund's policy is to capitalize purchases in excess of $5,000. When assets are
retired or otherwise disposed of, the cost and related accumulated depreciation are removed from
the respective accounts and the resulting gain or loss is reflected in operations.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Due to the Drinking Water Administrative Fund
During the 2007 fiscal year the Clean Water State Revolving Fund Loan Account Administrative
Fund received a lump sum amount for administrative fees revenue. This was intended to be split
between the two administrative funds in which $329,848 was payable to the Drinking Water
Treatment Loan Administrative Fund at year end. Due to an administrative error, this amount
was not paid in fiscal year 2008. During fiscal year 2009 the amount was paid with the exception
of$42,867.
2. Cash Deposits and Investment Risk
Cash of $694,603 and $868,735 at June 30, 2009 and 2008 respectively, was on deposit in the
State Treasurer's office's internal investment pool- OK Invest.
Investment Interest Rate Risk - the Fund does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to fair value losses arising from
increasing interest rates.
14
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRA TIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
2. Cash Deposits and Investment Risk (cont'd)
Investment Credit Risk and Custodial Credit Risk - the Fund has no investment policy that limits
its investment choices other than the limitation of state law imposed on the State Treasurer as
follows:
a. U.S. Treasury Bills, Notes and Bonds and u.s. Government Agency Securities with certain
ratings and maturity limitations.
b. Collateralized or insured certificates of deposit and other evidences of deposit issued by a
bank, savings bank, savings and loan association or credit union located in the state.
c. With certain ratings and maturity limitations, negotiable certificates of deposit, bankers
acceptances and commercial paper.
d. Obligations of state and local governments, including obligations of Oklahoma state public
trusts, with certain ratings and maturity limitations.
e. Collateralized repurchase agreements tri-party repurchase agreements.
f. Money market mutual funds and short term bond funds regulated by the SEC and in which
investments consist of obligations of the U.S. Government and its agencies and
instrumentalities and repurchase agreements collateralized by obligations of the U.S.
Government and its agencies and instrumentalities.
The state treasurer has determined that current holdings in OK Invest should be limited to
obligations of the United States government, its agencies and instrumentalities, tri-party
repurchase agreements collateralized at 102% with the collateral held by a third party in the
name of the Oklahoma State Treasurer and money market mutual funds which either directly or
indirectly invest in U.S. Treasury and/or Agency securities and repurchase agreements related to
such securities. OK Invest is not rated by a national rating agency. The overall weighted average
maturity of OK Invest is less than 2 years. OK Invest is not insured or guaranteed by the State of
Oklahoma, the Federal Deposit Insurance Corporation or any other government agency.
Concentration of Investment Credit Risk - the Fund places no limit on the amount it may invest
in anyone issuer. Limits are indirectly imposed through the Fund's participation in OK Invest.
The Fund has the following concentration of credit risk: 100% or $694,603 is invested in OK
Invest.
15
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
3. Capital Assets
A summary of equipment activity follows:
Beginning
Balance
July 1,2007 Additions Deletions
Ending
Balance
June 30, 2008
Other capital assets:
Computer software $ 56,400 $ 56,400
Automobile 19,875 19,875
Total other capital assets,
historical cost 76,275 76,275
Less: accumulated depreciation for:
Computer software 32,228 8,057 40,285
Automobile 1,987 3,975 5,962
Total accumulated depreciation 34,215 12,032 46,247
Other capital assets, net 42,060 (12,032) 30,028
Beginning
Balance
July 1,2008 Additions Deletions
Ending
Balance
June 30, 2009
Other capital assets:
Computer software $ 56,400 $ 56,400
Automobile 19,875 19,875
Total other capital assets,
historical cost 76,275 76,275
Less: accumulated depreciation for:
Computer software 40,285 8,057 48,342
Automobile 5,962 3,975 9,937
Total accumulated depreciation 46,247 12,032 58,279
Other capital assets, net 30,028 (12,032) 17,996
16
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
4. Indirect Costs
Indirect costs represent recoverable personnel costs charged to the Program by the Fund in
connection with administering and accounting for activities of the Program. The amount
allocated to the Program is based on a percentage of the Fund personnel costs as established in an
indirect cost allocation plan. The indirect cost rate for the year ended June 30, 2009 and 2008
was 81.54% and 83.03%.
17
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
INTERNAL CONTROL OVER FINANCIAL REPORTING AND COMPLIANCE
18
JOHN M. ARLEDGE & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
To the Members of the
Oklahoma Water Resources Board
We have audited the fmancial statements of the Oklahoma Water Resources Board/Oklahoma Clean Water
State Revolving Fund Loan Account Administrative Fund (the "Fund") as of and for the year ended June
30, 2009, and have issued our report thereon dated September 23, 2009. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Fund's internal control over financial reporting as
a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
Fund's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect misstatements
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the Fund's ability to initiate, authorize, record, process, or report fmancial data
reliably in accordance with generally accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the Fund's financial statements that is more than inconsequential will not
be prevented or detected by the Fund's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be prevented
or detected by the Fund's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal
control over financial reporting that we consider to be material weaknesses, as defmed above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Fund's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
309 NORTH BRYANT. EDMOND, OKLAHOMA 73034· (405) 348-0615· FAX (405) 348-0931 • www.jmacpas.com
MEMBER OF AICPA AND OS CPA
This report is intended solely for the information and use of the audit committee, management, and the
members of the Oklahoma Water Resources Board and is not intended to be and should not be used by
anyone other than these specified parties.

W 1700.3 .C623f 2008-2009 c.1
I.
State of Oklahoma
WATER RESOURCES BOARD
the water agency
OKLAHOMA CLEAN WATER STATE REVOLVING
FUND LOAN ACCOUNT ADMINISTRATIVE FUND
ANNUAL FINANCIAL STATEMENTS
AS OF AND FOR THE FISCAL YEARS ENDED JUNE 30, 2009 AND 2008
AND INDEPENDENT AUDITOR'S REPORTS
OKLAHOMA CLEAN WATER STATE REVOLVING
FUND LOAN ACCOUNT ADMINISTRATIVE FUND
ANNUAL FINANCIAL STATEMENTS
AS OF AND FOR THE FISCAL YEARS ENDED JUNE 30, 2009 AND 2008
AND INDEPENDENT AUDITOR'S REPORTS
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
ITABLE OF CONTENTS
Page
Independent Auditor's Report on Financial Statements 3
Management's Discussion and Analysis 5-8
The Basic Financial Statements
Statements of Net Assets 10
Statements of Revenues, Expenses, and Changes in Net Assets 11
Statements of Cash Flows 12
Footnotes to Statements 13-17
Internal Control over Financial Reporting and Compliance 18-19
Independent Auditor's Report on Internal Control and Compliance
2
JOHN M. ARLEDGE & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Members of the
Oklahoma Water Resources Board
We have audited the accompanying statements of net assets of the Oklahoma Water Resources
Board/Oklahoma Clean Water State Revolving Fund Loan Account Administrative Fund (the "Fund") as
of June 30, 2009 and 2008, and the related statements of revenues, expenses and changes in net assets and
cash flows for the years then ended. These fmancial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the fmancial statements referred to above present fairly, in all material respects, the
financial position of the Fund as of June 30, 2009 and 2008, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles generally accepted in the United
States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 23,
2009, on our consideration of the Fund's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over fmancial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit.
The Management's Discussion and Analysis section on page 4 is not a required part of the basic financial
statements but is supplementary information required by accounting principles generally accepted in the
United States of America. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion on it.
309 NORTH BRYANT. EDMOND, OKLAHOMA 73034 • (405) 348-{)615 • FAX(405) 348-{)931 • www.jmacpas.com
MEMBER OF AICPA AND OSCPA
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
MANAGEMENT'S DISCUSSION AND ANALYSIS
Our discussion and analysis of the Oklahoma Clean Water State Revolving Fund Loan Account
Administrative Fund's (the "Fund") financial performance provides an overview of the Fund's financial
activities for the fiscal year ended June 30, 2009. Please read it in conjunction with the Fund's financial
statements, which begin on page 10. The Oklahoma Water Resources Board (the "Board") administers
the Fund in conjunction with the Oklahoma Clean Water State Revolving Fund Loan Account Program
(the "Program").
Financial Highlights
• The Fund's net assets decreased 6.7%. Ending net assets decreased from $924,524 to $826,180
between FY 2008 and FY 2009.
• The Fund's net assets decreased around I% from FY 2007 to FY 2008. Ending net assets decreased
from $934,508 to $924,524 between FY 2007 and FY 2008.
Using This Annual Report
This annual report is presented in a format that substantially meets the presentation requirements of the
Governmental Accounting Standards Board (GASB) in accordance with generally accepted accounting
principles. The Fund is accounted for and presented similar to a special-purpose government engaged
solely in business-type activities.
The financial statements for the Fund are presented after the Management's Discussion and Analysis in
this annual report and then followed by the footnotes in this order:
• Management's Discussion and Analysis - that provides useful analysis that facilitates a better
understanding of the Fund's financial condition and changes therein.
• Basic Financial Statements
o Statements of Net Assets
o Statements of Revenues, Expenses and Changes in Net Assets
o Statements of Cash Flows
• Footnotes - that elaborate on the accounting principles used in the preparation of the financial
statements and further explain financial statement elements.
A Financial Analysis of the Fund
One of the most frequently asked questions about the Fund's finances is, "Has the overall financial
condition improved, declined or remained steady over the past year?" The Statement of Net Assets and
the Statement of Revenues, Expenses, and Changes in Net Assets report information about the Fund as a
whole and about its activities in a way that helps answer this question. The following tables present a
condensed comparative presentation of net assets and changes therein.
(Unaudited. See accompanying auditor's report.)
5
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Oklahoma Water Resources Board
CWSRF Loan Account Administrative Fund
Net Assets
Business-Type
Activities
June 30
2009 2008 2007
Current assets $ 1,017,540 $ 1,280,205 $ 1,295,881
Capital assets, net 17,996 30,028 42,060
Total assets 1,035,536 1,310,233 1,337,941
Current liabilities 173,356 385,709 403,433
Total liabilities 173,356 385,709 403,433
Net assets
Invested in capital assets, net 17,996 30,028 42,060
Unrestricted 844,184 894,496 892,448
Total net assets $ 862,180 $ 924,524 $ 934,508
Significant variances between 2008 and 2009 related to current liabilities is the result of the fund paying
back the overpayment of administrative fees received in fiscal year 2007 to the Drinking Water
administrative fund.
(Unaudited. See accompanying auditor's report.)
6
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Oklahoma Water Resources Board
CWSRF Loan Account Administrative Fund
Revenues, Expenses, and Changes in Net Assets
Business- Type
Activities
Years Ended June 30,
2009 2008 2007
Revenues
Operating revenues $ 1,016,003 $ 931,959 $ 935,329
Non-operating revenues 19,130 33,968 23,432
Total revenues 1,035,133 965,927 958,761
Expenses
Personnel expense 646,935 588,397 533,992
Indirect cost expense 345,344 294,208 262,498
Other administrative expenses 78,678 69,869 55,827
Depreciation expense 12,032 12,032 10,044
Total expenses 1,082,989 964,506 862,361
Net Income (loss) before transfers (47,856) 1,421 96,400
Transfers to other programs (14,488) (11,405) (9,655)
Increase in net assets (62,344) (9,984) 86,745
Total net assets - beginning 924,524 934,508 847,763
Total net assets - ending $ 862,180 $ 924,524 $ 934,508
There were no significant variances between the years.
Capital Assets
At the end of June 30, 2009, the Fund had $17,996 invested in capital assets, net of depreciation,
including computer software and an automobile. This represents a net decrease of $12,032 over the prior
year.
(Unaudited. See accompanying auditor's report.)
7
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRA TIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Oklahoma Water Resources Board
CWSRF Loan Account Administrative Fund
Capital Assets
(Net of accumulated depreciation)
Business-Type
Activities
Years Ended June 30,
Software
Automobile
$ 8,058
9,938
$ 16,115
13,913
$ 24,172
17,888
Totals $ 17,996 $ 30,028 $ 42,060
Other than depreciation, there were no additions or deletions to capital assets in FY 2009 or 2008.
See Note 3 to the financial statements for more detailed information on the Fund's capital assets and
changes therein.
Economic Factors and Next Year's Outlook
The Oklahoma Clean Water State Revolving Fund has been extremely popular with communities that
borrow from the program. The Program's financing strategy of providing long-term loans at 60% of
market rate has been consistent since program start up in 1990. No additional staff is planned at this
time, therefore Fund expenses should be fairly consistent with the amount expended in FY 2009.
Contacting the Fund's Financial Management
This financial report is designed to provide the Board's accountability of the Fund. If you have questions
about this report or need additional financial information, contact the Financial Assistance Division of
the Oklahoma Water Resources Board at 3800 N. Classen Blvd, Oklahoma City, OK 73118.
(Unaudited. See accompanying auditor's report.)
8
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
BASIC FINANCIAL STATEMENTS
9
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRA TIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
2009 2008
$694,603 $868,735
320,988 304,223
103,915
1,949 3,332
1,017,540 1,280,205
Statements of Net Assets - June 30, 2009 and 2008
ASSETS:
Current Assets:
Cash and cash equivalents
Administrative fee receivable
Other receivable
Interest receivable
Total CUITentassets
Noncurrent Assets:
Depreciable capital assets, net 17,996
Total noncurrent assets 17,996
Total assets 1,035,536
LIABILITIES:
Current Liabilities:
Accounts payable
Due to Drinking Water Treatment Loan Administrative Fund
130,489
42,867
Total current liabilities 173,356
NET ASSETS:
Invested in capital assets, net of related debt
Unrestricted
17,996
844,184
Total net assets $862,180
See accompanying notes to the basic financial statements.
10
30,028
30,028
1,310,233
55,861
329,848
385,709
30,028
894,496
$924,524
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Statements of Revenues, Expenses, and Changes in Net Assets - Years Ended June 30, 2009 and 2008
Change in net assets
2009 2008
$1,006,153 $ 929,459
9,850 2,500
1,016,003 931,959
646,935 588,397
345,344 294,208
78,678 69,869
12,032 12,032
1,082,989 964,506
(66,986) (32,547)
18,730 33,968
400
19,130 33,968
(47,856) 1,421
(14,488) (11,405)
(62,344) (9,984)
924,524 934,508
$862,180 $924,524
OPERATING REVENUES:
Administrative fee income
Application fee income
Total operating revenues
OPERATING EXPENSES:
Personnel expense
Indirect cost expense
Other administrative expenses
Depreciation expense
Total operating expenses
OPERATING INCOME (LOSS)
NON-OPERATING REVENUES (EXPENSES):
Interest income
Other income
Total non-operating revenues (expenses)
Net income (loss) before transfers
Transfers to Oklahoma Clean Water State Revolving Loan Account Program
Total net assets - beginning
Total net assets - ending
See accompanying notes to the basic financial statements.
11
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Statements of Cash Flows - Years Ended June 30, 2009 and 2008
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Administrative fee income s 989,388 s 923,556
Application fee income 9,850 2,500
Payments to employees (646,935) (588,397)
Payments to other suppliers (532,460) (275,572)
Other income 400
Net Cash Provided by Operating Activities (179,757) 62,087
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers to Oklahoma Clean Water State Revolving Loan Account Program (14,488) (11,405)
Net Cash Provided by (Used in) Noncapital Financing Activities (14,488) (11,405)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 20,113 33,740
Net Cash Provided by Investing Activities 20,113 33,740
Net Increase (Decrease) in Cash and Cash Equivalents (174,132) 84,422
Balances - beginning of the year 868,735 784,313
Balances - end of the year s 694,603 s 868,735
Reconciliation of operating income to net cash provided
by operating activities:
Operating income (loss) s (66,986) s (32,547)
Adjustments to reconcile operating income to net cash provided by
(used in) operating activities:
Depreciation 12,032 12,032
Other income 400
Change in assets and liabilities:
Decrease (Increase) in administration fee receivable (16,765) (5,903)
Decrease (Increase) in other receivable 103,915 106,229
Increase (Decrease) in accounts payable 74,628 (17,724)
Increase (Decrease) in Due to OWAdmin fund (286,981 )
Net Cash Provided by Operating Activities s (179,757) $ 62,087
See accompanying notes to the basic financial statements.
12
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
Footnotes to the Basic Financial Statements:
1. Summary of Significant Accounting Policies
Reporting Entity
The Oklahoma Water Resources Board/Oklahoma Wastewater Facility Construction Revolving
Loan Account Program (the "Program") was created pursuant to the 1987 Amendments (P.L.
100-4) to the "Clean Water Act" (P.L. 92-S00) to provide a perpetual fund for financing the
construction of wastewater treatment facilities for municipalities and other public entities. The
Program funds loans with Federal grants, State matching funds, principal repayments, bond
proceeds, and interest received on loans and invested cash balances. State matching funds are
provided through State appropriations or through the issuance of notes payable.
The Oklahoma Water Resources Board/Oklahoma Wastewater Facility Construction Revolving
Loan Account (the "Program"), Title 82 Oklahoma Statutes, Sections 108S.S1 et seq. was created
pursuant to the 1987 Amendments (P.L. 100-4) to the Federal Clean Water Act (P.L. 92-S00) set
apart from all other Oklahoma Water Resources Board accounts and programs to be permanent
and perpetual; not subject to fiscal year limitations. Title 82, Section 108S.64 created the
Oklahoma Water Resources Board/Oklahoma Wastewater Facility Construction Revolving Loan
Administrative Fund (the "Fund") for the purpose of administering the Program, transferring
monies into the Program and for other purposes authorized by the Federal Clean Water Act. The
Fund consists of revenues primarily from loan administrative fees, Fund investment earnings and
loan processing and application processing fees.
Administrative fees are assessed on loans made from the Program. Fees are assessed to each
participating borrower at the rate of one-half of one percent (O.S%) per annum of the amount of
each borrower's loan balance outstanding, and loan application fees.
The significant accounting principles and practices followed by the Fund are presented below:
Basis of Accounting and Measurement Focus
The Fund is accounted for and presented similar to a special-purpose government engaged solely
in business type activities.
The Fund uses the accrual basis of accounting whereby expenses are recognized when the
liability is incurred and revenues are recognized when earned.
The Fund uses the economic resources measurement focus where all assets, liabilities, net assets,
revenues, expenses and transfers relating to the Program and net income and capital maintenance
are measured.
The accompanying financial statements have been prepared in conformity with generally
accepted accounting principles as prescribed by the Governmental Accounting Standards Board
("GASB"). Under the guidelines of GASB Statement 20, the Fund has elected not to apply
13
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
1. Summary of Significant Accounting Policies (cont'd)
Financial Accounting Standards Board Statements and Interpretations issued after November 30,
1989.
Cash and Cash Equivalents
The Fund considers all highly liquid debt instruments purchased with an original maturity of
three months or less and money market funds to be cash equivalents.
Capital Assets
Capital assets are stated at cost, less accumulated depreciation. Depreciation is charged to
operating expense and is computed using the straight-line method. The useful life of software
has been estimated at 7 years. The useful life of automobiles has been estimated at 6 years.
Maintenance and repairs are charged to operations when incurred and improvements are
capitalized. The Fund's policy is to capitalize purchases in excess of $5,000. When assets are
retired or otherwise disposed of, the cost and related accumulated depreciation are removed from
the respective accounts and the resulting gain or loss is reflected in operations.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Due to the Drinking Water Administrative Fund
During the 2007 fiscal year the Clean Water State Revolving Fund Loan Account Administrative
Fund received a lump sum amount for administrative fees revenue. This was intended to be split
between the two administrative funds in which $329,848 was payable to the Drinking Water
Treatment Loan Administrative Fund at year end. Due to an administrative error, this amount
was not paid in fiscal year 2008. During fiscal year 2009 the amount was paid with the exception
of$42,867.
2. Cash Deposits and Investment Risk
Cash of $694,603 and $868,735 at June 30, 2009 and 2008 respectively, was on deposit in the
State Treasurer's office's internal investment pool- OK Invest.
Investment Interest Rate Risk - the Fund does not have a formal investment policy that limits
investment maturities as a means of managing its exposure to fair value losses arising from
increasing interest rates.
14
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRA TIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
2. Cash Deposits and Investment Risk (cont'd)
Investment Credit Risk and Custodial Credit Risk - the Fund has no investment policy that limits
its investment choices other than the limitation of state law imposed on the State Treasurer as
follows:
a. U.S. Treasury Bills, Notes and Bonds and u.s. Government Agency Securities with certain
ratings and maturity limitations.
b. Collateralized or insured certificates of deposit and other evidences of deposit issued by a
bank, savings bank, savings and loan association or credit union located in the state.
c. With certain ratings and maturity limitations, negotiable certificates of deposit, bankers
acceptances and commercial paper.
d. Obligations of state and local governments, including obligations of Oklahoma state public
trusts, with certain ratings and maturity limitations.
e. Collateralized repurchase agreements tri-party repurchase agreements.
f. Money market mutual funds and short term bond funds regulated by the SEC and in which
investments consist of obligations of the U.S. Government and its agencies and
instrumentalities and repurchase agreements collateralized by obligations of the U.S.
Government and its agencies and instrumentalities.
The state treasurer has determined that current holdings in OK Invest should be limited to
obligations of the United States government, its agencies and instrumentalities, tri-party
repurchase agreements collateralized at 102% with the collateral held by a third party in the
name of the Oklahoma State Treasurer and money market mutual funds which either directly or
indirectly invest in U.S. Treasury and/or Agency securities and repurchase agreements related to
such securities. OK Invest is not rated by a national rating agency. The overall weighted average
maturity of OK Invest is less than 2 years. OK Invest is not insured or guaranteed by the State of
Oklahoma, the Federal Deposit Insurance Corporation or any other government agency.
Concentration of Investment Credit Risk - the Fund places no limit on the amount it may invest
in anyone issuer. Limits are indirectly imposed through the Fund's participation in OK Invest.
The Fund has the following concentration of credit risk: 100% or $694,603 is invested in OK
Invest.
15
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
3. Capital Assets
A summary of equipment activity follows:
Beginning
Balance
July 1,2007 Additions Deletions
Ending
Balance
June 30, 2008
Other capital assets:
Computer software $ 56,400 $ 56,400
Automobile 19,875 19,875
Total other capital assets,
historical cost 76,275 76,275
Less: accumulated depreciation for:
Computer software 32,228 8,057 40,285
Automobile 1,987 3,975 5,962
Total accumulated depreciation 34,215 12,032 46,247
Other capital assets, net 42,060 (12,032) 30,028
Beginning
Balance
July 1,2008 Additions Deletions
Ending
Balance
June 30, 2009
Other capital assets:
Computer software $ 56,400 $ 56,400
Automobile 19,875 19,875
Total other capital assets,
historical cost 76,275 76,275
Less: accumulated depreciation for:
Computer software 40,285 8,057 48,342
Automobile 5,962 3,975 9,937
Total accumulated depreciation 46,247 12,032 58,279
Other capital assets, net 30,028 (12,032) 17,996
16
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
4. Indirect Costs
Indirect costs represent recoverable personnel costs charged to the Program by the Fund in
connection with administering and accounting for activities of the Program. The amount
allocated to the Program is based on a percentage of the Fund personnel costs as established in an
indirect cost allocation plan. The indirect cost rate for the year ended June 30, 2009 and 2008
was 81.54% and 83.03%.
17
OKLAHOMA WATER RESOURCES BOARD
OKLAHOMA CLEAN WATER STATE REVOLVING FUND LOAN ACCOUNT
ADMINISTRATIVE FUND
ANNUAL FINANCIAL REPORT
As of and for the Years Ended June 30, 2009 and 2008
INTERNAL CONTROL OVER FINANCIAL REPORTING AND COMPLIANCE
18
JOHN M. ARLEDGE & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND
ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
To the Members of the
Oklahoma Water Resources Board
We have audited the fmancial statements of the Oklahoma Water Resources Board/Oklahoma Clean Water
State Revolving Fund Loan Account Administrative Fund (the "Fund") as of and for the year ended June
30, 2009, and have issued our report thereon dated September 23, 2009. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Fund's internal control over financial reporting as
a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
Fund's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect misstatements
on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the Fund's ability to initiate, authorize, record, process, or report fmancial data
reliably in accordance with generally accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the Fund's financial statements that is more than inconsequential will not
be prevented or detected by the Fund's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be prevented
or detected by the Fund's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal
control over financial reporting that we consider to be material weaknesses, as defmed above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Fund's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
309 NORTH BRYANT. EDMOND, OKLAHOMA 73034· (405) 348-0615· FAX (405) 348-0931 • www.jmacpas.com
MEMBER OF AICPA AND OS CPA
This report is intended solely for the information and use of the audit committee, management, and the
members of the Oklahoma Water Resources Board and is not intended to be and should not be used by
anyone other than these specified parties.